NEW YORK (AP) — The parent company of Toys R Us is turning to a key rival to restart its e-commerce business ahead of the holiday shopping season.
Tru Kids Brands is teaming up with discounter Target Corp. to relaunch Toysrus.com, according to a joint release.
The site, which launched Tuesday, features product reviews and videos and directs browsers to a buy button at Target.com to complete the purchase.
Target and Tru Kids declined to share details of the financial terms. However, while analysts said the move is a big win for Target’s toy business, they question why Toys R Us’s parent company would decide to outsource e-commerce to a third party.
The move comes as the first two new Toys R Us stores — one in Houston, the other in Paramus, New Jersey — will open in November as part of a small comeback of the defunct iconic toy chain in the U.S. Target.com will also handle online sales in those two stores.
Retailers including Walmart, Party City, and Target have been competing for sales left on the table after Toys R Us filed for bankruptcy and liquidated in March 2018. But Target has been one of the most aggressive. Last October, it devoted extra space at 500 locations near former Toys R Us stores to feature a bigger selection and larger toys like playhouses.
Neil Saunders, managing director at GlobalData Retail, said the Tru Kids’ deal with Target helps the Minneapolis-based discounter bolster its already strong toy sales. But it also helps Toys R Us hand off the complex issues of fulfillment. Still, he said the deal “raises a lot of questions on Toys R Us’s future.”
“It’s a neat solution but not an ideal solution,” Saunders said. “It’s ceding control to another competitor.”